Policy-level talks between Pakistan and International Monetary Fund (IMF) started on Wednesday in Dubai wherein both sides would discuss the main contours of the upcoming budget 2015-16 apart from discussing 7th quarterly review under Extended Fund Facility (EFF).

Sources informed that Pakistan and IMF concluded the technical talks, which started from 1st May 2015. Finance Minister Ishaq Dar has reached Dubai to join his economic team for holding policy level talks, to be concluded on May 9. Sources further informed that Pakistan and IMF’s officials are negotiating for the 7th quarterly review under Extended Fund Facility (EFF).

Pakistan and IMF would finalise the 7th review, which will become the basis for the release of the next tranche worth $550 million after the approval of the IMF’s executive board by late June or early July. Pakistan had received $3.5 billion from the Fund in six tranches since September 4, 2013, when the Executive Board approved the three-year extended arrangement under the EFF in the amount of SDR 4.393 billion (about $6.12 billion, or 425 percent of Pakistan’s quota at the IMF).

Both the sides during ongoing talks would also finalise the salient features of the next budget 2015/16, which is likely to be presented in the National Assembly in the first week of next month of June.

The Finance Ministry will share the draft of budget strategy paper, which set the main contours of the budget. The government will inform the Fund that it would fix the budget deficit at 4 percent of the GDP for the next fiscal year as against the target of 4.9 percent of the GDP of the outgoing year. Federal tax revenue target would be around Rs 3.2 to Rs3.3 trillion. Tax collection target was initially Rs 2.8 trillion for the current year but later it was revised to Rs 2.69 trillion.

The government would share the figure of GDP growth target of 6 percent for the next fiscal year as against the target of 5.1 percent. The volume of the Public Sector Development Programme (PSDP) could be Rs 570-575 billion for the upcoming year 2015-16 as against the Rs 525 billion fixed for the outgoing financial year. defence budget would likely to increase by 10 percent for the upcoming year. The defence budget could be Rs 770 billion for 2015-16 as against Rs 700 billion of the outgoing fiscal year.

“Finance Minister Senator Mohammad Ishaq Dar arrived in Dubai from Baku after attending the 48th annual meeting of ADB Board of Governors, its related events and undertaking other engagements on the sidelines of the BoG meeting”, said a brief statement issued by the Finance Ministry here. It further added that Minister will join the team comprising Finance Ministry officials as well as officials from other ministries already engaged in talks with the IMF delegation concerning the IMF 7th review.

Pakistan it may be mentioned entered an Extended Fund Facility (EFF) with International Monetary Fund (IMF) in September 2013. The meetings for the 7th quarterly review are taking place at Dubai from 01-09 May 2015, the statement added.